The FIA and Bernie Ecclestone’s FOM group have signed the a bilateral Agreement, guaranteeing the governance and financial structure of F1 through to 2020, it has been announced today.
There has been some confusion about what this means; it is not a Concorde Agreement, it sets out the framework for a Concorde Agreement, but at this stage it is a bilateral agreement between the two parties. Ecclestone also has bilateral agreements with the F1 teams, except Marussia.
Although the FIA’s statement concludes, “Now that the agreement is operative, the parties will move towards the conclusion of a multi-party Concorde agreement,” in practice Ecclestone may not be in any hurry to conclude this, now that the parties are tied in with a series of bilateral agreements and he has argued many times in the past that “F1 doesn’t need a Concorde Agreement”.
Today’s announcement means that the FIA has a greatly improved financial deal from Ecclestone, adding up to €25 million per year, plus the €15 million annually it gets from a levy on F1 teams’ points.
But perhaps the most significant development is the activation of the new rule making process in Formula 1, with the creation of a Strategy Group, made up of 18 voting members, equally split between the FIA, FOM and six leading teams.
This will be new ground for F1 and will hand significant power to the top teams, like Red Bull, Mercedes, McLaren and Ferrari. Williams also has a seat on the group while a sixth seat will be occupied by the highest placed team other than the top four. Currently that would be Lotus.
This would mean, for example, that if there were a serious effort to introduce proper cost controls in F1 and this was backed by the FIA and the FOTA teams, McLaren, Williams and Lotus might side with the FIA, while Ferrari and Red Bull might line up with the FOM vote against. That would leave Mercedes, which is still a FOTA member, with an decisive vote.
Ecclestone will be confident that he can work behind the scenes to win over Williams and Lotus as well as Mercedes in a scenario like that and it will be fascinating, once the FIA presidential election is concluded in December, to see what the FIA does about cost control. Current president Jean Todt had the chance to include cost control into the F1 Sporting Regulations, with the backing of 10 teams but he didn’t want a fight with Red Bull.
Meanwhile now that Niki Lauda and Toto Wolff are running Mercedes, they are a more natural Ecclestone ally than was Ross Brawn.
All of this stacks the odds against F1 getting a really meaningful cost control mechanism in place if Ecclestone, Red Bull, Ferrari and Mercedes don’t want one.
McLaren boss Martin Whitmarsh said in Singapore that this Strategy Group scenario will present some real moments of crisis of conscience for top teams who are part of FOTA as they will be under pressure to represent the smaller teams and to get a serious grip on costs once and for all, but they have their own self interest as well.
The F1 commission is still in place and has not been slimmed down as had been mooted. So if the teams work together with other voting parties like the tyre supplier, sponsors and promoters it is possible that they could overturn a Strategy Group proposal.
This will be a key area for F1 in the next eight years and you will see many stories arising from this new dynamic, partucularly around cost control.
Speaking on today’s announcement Todt said: “We can be proud of this agreement, which establishes a more effective framework for the governance of the FIA Formula One World Championship. The FIA looks forward to continuing to fulfill its historic role as the guarantor of both regulation and safety in F1 for many years to come.”
Todt’s rival for the presidency, David Ward, said, “The final conclusion of the negotiations over the Concorde Agreement is a very positive development for the FIA. This is a solid achievement by Jean Todt and I congratulate him for it. The question now is what will the new resources from Concorde be used for? The answer should be for investment in ‘grass roots’ development of motor sport.